National Australian Bank Will Launch Stablecoin On Algorand• January 19, 2023 9:34 pm • Comments
The National Australia Bank just announced that it would be releasing a new stable coin and it was confirmed that it would be launched on the Algorand blockchain.
This is considered a huge value add for Algorand which is a blockchain ecosystem that has continued to have consistent organic growth throughout the past year despite bearish market conditions.
The new stable coin is known as AUDN and will allow customers to settle transactions using Australian dollars.
It is considered a significant improvement over the current existing process because the fact that it has moved over to the blockchain will allow for real-time settlement.
The National Australia Bank is also not the first bank in the country to release such a stable coin as the Australia and New Zealand Bank had also released a stable coin last year.
Go Algorand!!@NAB – National Australian Bank has created its own stablecoin and it will be set up on the @ethereum and @Algorand blockchain. NAB's stablecoin is fully backed, one-for-one by Australian dollars.
— Algorand Indonesia (@AlgoIndonesia) January 19, 2023
NAB will be the second of Australia’s big four banks to launch a stablecoin, after rival Australia and New Zealand Bank (ANZ) minted its own, dubbed A$DC, last year.
Early uses of A$DC indicate that Aussie dollar stablecoins could play a role in Australia’s energy transition plans. In June, an investor used the stablecoin to purchase carbon credits.
NAB’s stablecoin will also allow for carbon credit trading, the AFR reported. Other functions could include cross-border payments and repurchase agreements.
Individual banks are working on their own stablecoins after a failed attempt to cooperate on a single industry-wide Australian dollar stablecoin. The project never got off the ground due to competition concerns and the different stages each bank was at in its crypto strategy.
Now that two of the large banks within the country have created their own stable coins, it seems very likely that it is only a matter of time before the rest of the large banks join the trend and create stable coins as well.
The fact that large financial institutions are all doing this indicates the tremendous value that blockchain and crypto has in disrupting existing financial systems.
The government of Australia also seems promising when it comes to creating a regulatory framework that will allow for the mass adoption of crypto and blockchain.
This is essential in order for growth and innovation to take place as investors can allocate their capital to the industry without fear of regulatory intervention.
Unfortunately, not every region is as favorable to the industry as Australia, but it seems that adoption is inevitable as those who create a favorable environment will be able to take advantage of the benefits of crypto the most.
— Crypto Rosetta (@cryptorosetta) January 19, 2023
A stablecoin is a type of cryptocurrency whose value is pegged to another asset class, such as a fiat currency or gold, to stabilize its price. It is considered to be more efficient and cheaper than the interbank cross-border payments solution SWIFT.
In this case, the AUDN will be backed fully to the Australian dollar and the money will be held by the NAB.
NAB is the second major Australian bank to be involved in the creation of a stablecoin. Earlier, Australia and New Zealand Banking Group (ANZ) teamed up with crypto custodian Fireblocks to mint a stablecoin pegged to the Australian dollar.
Australia has introduced token mapping to identify characteristics of all crypto tokens and how they are managed, and its central bank has started a pilot test to explore potential use cases for Australia’s own CBDC, expected to be completed by mid-2023.
— Whitepaper (@whitepaper_io) January 20, 2023
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